New Delhi, Oct. 20: Be prepared for a “temporary” slowdown, the Prime Minister advised the country today while issuing an unqualified assurance that banks in India are safe.

“We must be prepared for a temporary slowdown in the Indian economy... the most pessimistic estimates place it at no less than 7 per cent,” Singh told the Lok Sabha. The government had earlier projected an 8 per cent growth rate.

Although the “most pessimistic” forecast would still leave India among the fastest growing economies in the world, the slowdown could mean fewer new jobs and fewer new factories and call centres in the country.

Pressure on the economist-Prime Minister to address the nation had mounted from both within his party and the Opposition after the bloodbath on the stock markets and a sharp fall in industrial production in August.

Singh used the opportunity to reaffirm the health of banks in India. “Our banks and deposits are entirely safe... Indian banking is not directly exposed” to the global credit crisis, he said. “Their (Indian banks’) exposure to other problem assets is also minimal.”

“Our banks, both in the public sector and in the private sector, are financially sound, well capitalised and well regulated. There should be no fear of a failure of any bank. In particular, I wish to assure depositors in our banks that their deposits are entirely safe,” he said.

His statement came close on the heels of speculation on the health of a private bank. Bengal finance minister Asim Dasgupta had also said nationalised banks were safer than foreign and private banks.

Economists, who had already factored in the possibility of a lower growth rate, welcomed the Prime Minister’s statement. “The speech is a reassurance the growth moderation, though prevalent, would not be sharp or prolonged,” said D. Joshi, the chief economist of credit rating agency Crisil.